Levi Strauss will pay for all complete and in-progress orders and will use raw materials already received by suppliers for product orders in later seasons.

Levi Strauss will pay for all complete and in-progress orders and will use raw materials already received by suppliers for product orders in later seasons.

Levi Strauss has committed to paying in full for complete and in-progress orders from its suppliers across the world and has provided access to financial support to all of its suppliers to help them weather payment delays.

The denim giant issued a public statement saying it was working with its suppliers to find the best way through the global Covid-19 pandemic.

As part of that commitment, it also plans to use raw materials already received by suppliers for product orders in later seasons. 

The company confirmed it has extended its payment terms with suppliers but said it believes its current terms "are consistent with industry practice" and says it has not asked for any discounts on payments.

The Worker Rights Consortium said it was informed by Levi Strauss on 2 July all of its suppliers now have access to low-cost financing, guaranteed by the company, to help them weather Levi's payment delays.

It added Levi Strauss is providing this access via an expansion of its IFC loan programme and the creation of a new loan facility designed to accommodate suppliers ineligible for the IFC programme. As a result, the company is now protecting the cash-flow of all suppliers, despite its extension of payment terms.

"Our sourcing leads are staying in close conversation with suppliers and we are factoring their circumstances into our decisions," Levi Strauss said in a statement. "Furthermore, we have worked with the International Finance Corporation (IFC) since 2014 on a programme that suppliers can use to get early payments at favourable market rates. The majority of our products are made by suppliers with access to the program and more will soon have access. The IFC programme also provides better rates to suppliers who perform well on our social and environmental assessments, thus incentivising suppliers to respect and protect worker rights. We provide additional assistance to suppliers not in locations served by the IFC programme and are exploring collective industry efforts to support suppliers and their workers.

"As our stores and wholesale partners open back up, we are starting to see demand come back and production turning back on. In addition, we have shared, and will continue to update, health and safety guidelines related to Covid-19 with suppliers that remain open or that will soon re-open, as government regulations permit. In addition, given the intensive needs facing apparel workers in the face of this crisis, the Levi Strauss Foundation announced in early April that it is granting US$1m to address health, food and safety net needs facing apparel workers in sourcing communities, with a focus on women."

The company this morning (8 July) announced it is to slash its corporate workforce by approximately 700 people, which represents about 15% of its global non-retail, non-manufacturing headcount. 

The news came as the jeans giant reported a net loss of US$363.5m for the second quarter ended 24 May.